1. Recruitment Agencies
- Past, Present And Future?
I have worked in the
recruitment industry
(on the Agency side)
for over 20 years.
W
hen I started in
recruitment – the
technology of choice
for getting a resume
into the hands of an employer was a fax
machine. As a backup, we sent a good
copy via courier. And employers and
candidates and recruiters all spoke on
landlines! How things have changed.
Around the mid-nineties I was invited to a
demonstration of the “Internet” at an upmarket
business breakfast. It was like looking at the
future as a virtual reality. So much so – when I
returned to my office – I informed our Admin
Manager that the first candidate who asked to
‘email their resume’ – would be the signal for
O’Neil’s Personnel to enter that virtual reality
and get a website online.
It took 10 months to happen.
I still remember the excitement of that
conversation. The interesting thing was, it was
a young 19 year old lad who sounded quite
unsure of himself and stumbled over several
of his sentences. Except right at the end he
blurted out “can I email my resume to you
please?” That young man would be in his early
40s now and probably completely at ease with
how recruitment and technology have evolved.
In 1997 our first website went live. We made
sure we had “Hot Jobs” and “Hot Candidates”
pages to interact with the powerful online
trends that quickly emerged. Trends like job
boards, computerised agencies, and everyone
– and I mean everyone - in the industry using
email and attachments for instant delivery.
I don’t say it was all good. Looking back –
this was the era of “globalisation”. And there
were just as many failures as there were
success stories. After all who can forget the
arrival “hype” of monster.com… and then
their quiet withdrawal from our shores three
years later? Macro ideas are great for a macro
economy. New Zealand has never been a
macro economy.
Recruitment Agencies – both global and
local continued to flourish in New Zealand
until the global financial crisis (GFC) in 2008.
With global companies hemorrhaging profits,
it was inevitable that global recruitment firms
also suffered. Universally, employers large
and small, experienced drastic downturn in
their profits and looked for ways to cut costs.
Marketing / HR and recruitment fees were
the first to go. Around this time a perception
among employers began to emerge.
Recruitment was not that difficult any more.
Going to a job board and posting your job ad
online was so much easier and less expensive
now – anyone could do it! Managers certainly
didn’t need to pay recruitment fees to find a
new member of staff. And if you wanted to
set up your own in-house recruitment centre,
there was ‘off the shelf’ software readily
available to capture candidate information and
support a sustainable recruitment process. Or
so it seemed…
With the rise of Facebook, LinkedIn and
a plethora of other social and business
networking sites in the last 10 years – the
key drivers of recruitment have irrevocably
changed. Personalised approaches to
candidates in full employment via email or
Skype are now considered quite acceptable –
even expected! Twenty years ago it was called
“shoulder tapping” or “headhunting” – and it
was frowned upon.
In the present time – cracks have appeared
in the fabric of our online recruitment world.
Recently I heard a candidate liken a Skype
interview to “sucking oranges through a
straw”. Not easy because of delays in internet
speed and also he could not ascertain any
sense of what the interviewer was
really like. Isn’t that the point of an
interview?
Another interesting observation is
the ratio of successful hires completed
directly by employers using online
advertising as opposed to working
with an external supplier. Shortly after
I commenced working in recruitment
– I remarked to an employer that 50
percent of the time he would find the
person he was looking for by simply
placing an ad in the newspaper.
The other 50 percent of the time –
he would struggle to fill the role.
Surprisingly this ratio still holds true
to the present day.
Add to this, the number of candidates
who no longer bother emailing resumes to
in-house career centres because they never
get any ‘face time’ – and the crack widens.
From an agency perspective – this situation is
a tricky one. I know of many instances where
candidates sent by agencies – get the job –
then tell the employer they had sent their
resume a year ago to their career centre and
never heard back!
Robust recruitment processes are labour
intensive. Even with the help of the latest
and greatest software to better support the
workflow of a recruiter – the requirement to
spend ‘face time’ with selected candidates
and employers cannot be delegated to an app.
When a product or service ‘goes global’ the
best economists will tell you – the supporting
business plan and processes must be robust
and profitable – or the venture will end badly.
To achieve a robust and profitable business
model – commoditise what you are selling.
Human beings, AKA candidates - come
in all shapes sizes and skill sets. It is not
in their nature to be commoditised. This
immediately means the amount of time spent
on a thorough recruitment process is variable
– never fixed. Which means the process for
commoditisation cannot be completed.
But will this hold true in the future? Is
there a space for recruitment agencies –
global or local in the business landscape
in New Zealand in the next decade? What
are the key drivers going to be in the next
decade which will influence the recruitment
market in New Zealand?
DECEMBER 2014 / JANUARY 201510 HUMAN RESOURCES
RECRUITMENT ANNETTE SLEEP

2. DECEMBER 2014 / JANUARY 2015 11HUMAN RESOURCES
The future for recruitment agencies in this
country is predicated upon their ability to
add sustainable value to employers. The days
of international companies signing global
agreements with multinational recruitment
brands – have passed. Why? Because the
business model is unsustainable. Expectations
are not consistently delivered either to the
shareholders or to their customers.
Why are expectations not delivered?
Because candidates (on any continent) are not
commodities!
Moving forward – the key driver of the
recruitment market in the next decade is
the speed of change and its impact on our
economy.
As the uses of the Internet and technology
have evolved in the last two decades – the
speed of change sweeping through vertical
markets and economies has increased
exponentially. These lightening changes
impact directly upon staffing levels and
recruitment. When a company wins a
new contract – an increase in staff is often
required. When a business sheds staff it may
be because of improved technology or the
loss of a major client. Either way, managers
have to move quickly to capitalise on the
opportunity or minimise their losses.
The optimum staffing solution in such
volatile environments is to utilise flexible
staffing solutions, by employing temporary or
contract staff.
This solution gives the employer 100 percent
flexibility in business decision making for
the least amount of operational expenditure
(OPEX). Speaking of which, with the number of
global companies maintaining strict head count
freezes at this time – yet still requiring skilled
staff to do the work – the demand for temp
employees has been steadily growing for some
time. (No CAPEX involved!)
Increasingly in the future the ability of
an agency to deliver high quality temp /
contract employees in a timely manner – will
be paramount. Agencies having the local
knowledge and robust internal processes to
deliver high quality temp and contract staff
will probably flourish.
The big unknown for us all – agency or
in-house recruiters – is how the GFC will
play out.
In spite of New Zealand being touted
as a “rock star economy” the daily reality
is somewhat more muted. (Maybe if we
compared the recruitment industry in New
Zealand to those of Greece or Spain…) The
GFC is far from over – it is on a “go slow”. This
creeping menace will continue to undermine
the confidence of businesses – large and small
for the foreseeable future. When business
owners / managers are worried about their
markets – they do not employ permanent staff.
They hire temps or contractors.
So what will recruitment agencies look like
in the next decade?
Based on the above - successful agencies
will be privately owned and locally based.
Their value add offering will be their local
knowledge of candidates and employers.
They will use sophisticated CRM software to
track candidates and client orders. Their staff
will be highly trained to follow processes
which are regularly fine-tuned to meet the
ever changing niche markets of opportunity
that will appear and just as quickly disappear
in increasingly volatile markets. Use of social
media to attract candidates will continue to
grow for the next few years – but a tipping
point will come when the consequences of
a “tell all / reveal all” culture come home to
roost for candidates. Agencies investing
in formal staff training and induction
programmes will be well positioned to take
advantage of the clients left unserviced by
the agencies and sole traders forced out of
the market. The process of recruitment will
remain labour intensive and become far
more specialised than it is now.
In closing – there is one great truth which
overarches all of the above comments:
Good staff are always hard to find! HR
Annette Sleep is
Managing Director of
O’Neil’s Personnel.
Licensed immigration advisers
delivering clients reliable
immigration knowledge, advice
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